What’s the difference between an appraisal and an inspection? In the simplest terms, a home’s appraisal calculates its value, while an inspection determines its condition.
What’s the purpose of an appraisal? When you apply for a mortgage (or, occasionally, when you’re using cash to purchase), an unbiased appraisal is the best way to confirm the value of the home based on the sale price, regardless of what you’re willing to pay for it. This is especially critical in today’s seller’s market where low inventory is increasing bidding wars and pushing prices upward. However, your lender will only allow you to borrow based on the true value of the home.
A home inspection, meanwhile, determines the current state, safety, and condition of the home before you finalize the sale. If any issue were to come up (e.g., the condition of the roof or A/C unit), it counts as an opportunity for the buyer and seller to negotiate the terms of the sale before closing.
The bottom line is that the appraisal and inspection are critical steps in purchasing a home. Of course, they’re not steps you need to take alone. We at the Holt Real Estate Team are here to guide you every step of the way, from the beginning of your home search to the closing table.
If you’re looking to purchase a home, give us a call or send an email. My team and I would love to help you.